One in four adults currently have less than £500 in savings

[ad_1]

  • 1 in 4 UK adults have less than £500 in savings
  • Only one in three people think they will benefit from lower interest rates.
  • Majority believe the UK economy is ‘working against them’

One in four adults currently have less than £500 in savings as households continue to feel financial pressure.

Two in five people have less than £2,000 in savings, according to data from market research company Savanta.

It comes as the Monetary Policy Committee meeting is due to deliver its decision on the Bank of England’s base rate later today.

The Bank of England is expected to keep its benchmark rate at 5.25 percent for the fourth time in a row, but economists predict interest rates could start to fall this year as inflation slows.

Feeling the pressure: one in four UK adults currently have less than £500 in savings

Feeling the pressure: one in four UK adults currently have less than £500 in savings

Despite the falling inflation rate, many households are still feeling the pressure of high borrowing costs and inflation that is slow to ease.

Families have been particularly hard hit, with little money available at the end of the month.

In fact, the percentage of The number of Britons without disposable cash at the end of each month has almost doubled between 2022 and 2023. – rising from 11 per cent in 2022 to 21 per cent in 2023, data from Nationwide Building Society suggests.

Today, only one in three people believe that a reduction in interest rates will benefit them financially, with 36% of them believing that a change in rates will have no impact on them.

Data shows the public mood is generally pessimistic, with seven in ten people believing there will be no improvement in the economy in 2024.

The majority of the public believe the economy is working against them, with 54 per cent indicating they believe the UK economy is currently working against them.

How much should you have in savings?

Personal finance experts recommend keeping three to six months of family expenses in a cash savings account.

The emergency fund should cover your rent or mortgage payments, utility bills, grocery shopping and child care and can be accessed at any time if circumstances change.

Among those with less than £2,000 in savings, which includes cash savings and investments, more people consider themselves savers than spenders, showing the difficulty of saving with such high costs students.

This comes as savings rates hit 15-year highs in 2023.

On the other side of the coin, rising interest rates mean the cost of borrowing has skyrocketed.

Mortgage costs increased significantly in 2023, before starting to slowly decline in the final quarter.

Nationwide said average monthly mortgage repayments were £722 in 2021, £774 in 2022 and £880 last year, an increase of 22% over the period.

Chris Hopkins, director of policy research at Savanta, said: “The rising cost of living means a significant proportion of the UK population is struggling, despite the government’s optimism of an economic recovery ahead of the general election.

“Make no mistake, our research reveals that a growing number of people are really struggling and currently see no end in sight.

“In the short term, these results show that it will still be some time before the public feels the benefits of stabilizing inflation.

“Longer term, there are serious questions about the sustainability of the majority of the public believing the economy is geared against them.”



[ad_2]

Source link

Scroll to Top